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The Adoption of International Financial Reporting Standards
What do you need to know?
1. Similarity to Canadian GAAP
2. Dates of implementation
3. Structure of Information – where to find it
IFRS vs. Canadian GAAP
The overriding Principles and Conventions of IFRS are laid out in a document
entitled, ‘Framework for the Preparation and Presentation of Financial
Statements’. Some key points of the framework include:
Qualitative Characteristics of Financial Statements
Qualitative characteristics are the attributes that make the information provided in
financial statements useful to users. The four principal qualitative characteristics
are understandability, relevance, reliability and comparability.
Understandability
Readily understandable by users with reasonable knowledge and a
willingness to study the information with reasonable diligence.
Relevance
Information is relevant when it influences the economic decisions of users.
Reliability
Information is reliable when it is free from material error and bias and can
be depended upon by users to represent faithfully that which it attempts to
represent.
Comparability
Users must be able to compare financial statements of an entity through
time; thus, transactions must be accounted for in a consistent way over
time and throughout an entity.
IFRS – By Section Number
IAS 1 – Financial Statement Presentation
IAS 2 – Inventories
IAS 7 – Statement of Cash Flows
IAS 8 – Accounting Policies, Changes in Estimates, and Errors
IAS 10 – Subsequent Events
IAS 11 – Construction Contracts
IAS 12 – Income Taxes
IAS 16 – Property, Plant, and Equipment
IAS 17 – Leases
IAS 18 – Revenue
IAS 19 – Employee Benefits
IAS 20 – Accounting for Government Grants
IAS 21 – Accounting for Foreign Exchange
IAS 23 – Borrowing Costs
IAS 24 – Related-party disclosures
IAS 26 – Retirement Benefit Plans
IAS 27 – Consolidated and Separate Financial Statements
IAS 28 – Investments in Associates
IAS 29 – Hyperinflationary Economies
IAS 31 – Joint Ventures
IAS 32 – Financial Instruments – Presentation
IAS 33 – Earnings per Share
IAS 34 – Interim Financial Reporting
IAS 36 – Impairment of assets – IFRS allows reversal of IFRS
IAS 37 – Provisions, contingent liabilities and assets
IAS 38 – Intangible Assets
IAS 39 – Financial Instruments – Recognition and Measurement
IAS 40 – Investment Property
IAS 41 – Agriculture
IFRS 1 – Adoption of IFRS
IFRS 2 – Share-based Payment
IFRS 3 – Business Combinations
IFRS 4 – Insurance Contracts
IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations
IFRS 6 – Exploration for and Evaluation of Mineral Properties
IFRS 7 – Financial Instruments - Disclosures
IFRS 8 – Operating Segments
IFRS 9 – Financial Instruments
GAAP / IFRS for Grade 11 and Grade 12 Accounting
Column one is a list of GAAP from Syme’s Accounting One textbook. Column two is where the similar concept occurs
under IFRS. Column three is an explanation that one could use in a Grade 11 and 12 classroom.
Canadian GAAP
Conservatism
IFRS Equivalent
Reliability – Prudence
Consistency Principle
(Framework para. 37)
Comparability
(Framework para. 39)
Cost Principle
Measurement
Full Disclosure
(Framework para. 100)
Completeness
Going Concern
(Framework para. 38)
Going Concern
(Framework para. 23)
Materiality
Relevance – Materiality
Objectivity
(Framework para. 29)
Reliability - Neutrality
Revenue Recognition
(Framework para. 36)
IAS 18 – Revenue
Business Entity
Time Period
Matching – n/a
Not found.
Not found.
n/a
Description
Prudence is a degree of caution in making judgements
such that assets or income are not overstated and
liabilities and expenses are not understated.
The measurement and presentation of transactions must
be carried out in a consistent way throughout an entity
and over time for that entity. If methods change, users
must be informed as to the impact of the change.
In most circumstances, assets are recorded at the amount
of cash or cash equivalents paid at the time of their
acquisition.
To be reliable, financial information must be complete, as
an omission can cause information to be false and
misleading.
The financial statements are normally prepared on the
assumption that the entity will continue in operation for the
foreseeable future. Hence, elements remain at their cost,
not adjusted to their liquidation value.
Information is material if its omission or misstatement
could influence the decisions of users. Thus, all material
information must be reported.
To be reliable, the information contained with the financial
statements must be neutral, that is, free from bias.
Revenue shall be measured at the value of the
consideration received or receivable. Transactions are
recognized when they occur not when cash is paid.
n/a
n/a
Matching no longer exists under Canadian GAAP.